Forward Air (NASDAQ: FWRD) announced Tuesday a new way to tackle the trucking industry’s capacity headwinds.

The Greeneville, Tennessee-based asset-light trucking and logistics company will now provide additional compensation to team and solo owner-operators depending on the destination of the load. The “destination-based” pay increases for fleet partners in its less-than-truckload and truckload segments are designed to incent capacity providers to carry loads into congested markets that present additional challenges for drivers.

“We are excited to make this adjustment, as it helps level-set supply and demand,” said Tim Parker, SVP of linehaul logistics. “Some areas of the country are less attractive for drivers due to factors such as urban road congestion, crowded fuel stops, limited parking or frequent road construction. These factors can lead to reduced utilization and higher equipment maintenance costs.”

The new model raises pay as high as 25 cents per mile for teams and 12.5 cents per mile for solo operators headed to the Northeast and by lesser amounts in other regions.

Image: Forward Air

The company said the increase is also aimed at supporting its organic growth initiatives, which include the addition of a more traditional LTL service offering outside of its airport-to-airport routes.

Forward said the pay hike to owner-operators was its fifth in the last four years.

In March, Forward implemented its largest-ever pay increase for capacity providers. That pay bump included an increase of 11 cents per mile for team owner-operators and a 5-cent increase for individual operators. The company also implemented a sign-on bonus of $10,000 for team trucks and $4,000 for solo trucks in conjunction with the March pay hike.

Forward’s pay programs are designed to attract and retain drivers that are transitioning to become owner-operators or fleet owners.

The implementation of Forward’s new pay structure follows recent announcements raising pay at a few TL fleets in just the past couple of days.

“From our constant review of per mile compensation, increased dedicated opportunities, the reliability of our closed network and our unique Fleet Forward program that pays multiple truck owners an additional rate per mile on all miles based on the size of their fleet — the message is clear, we are committed to the sustained success of our fleet,” said Kyle Mitchin, chief people officer.

Click for more FreightWaves articles by Todd Maiden.

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